Demographic Differentials in the Demand for Alcohol and Illicit Drugs
AbstractThe purpose of this paper is to estimate demographic differentials in alcohol and illicit drug use, participation, own price effects and cross price effects. This paper uses a data set of over 49,000 individuals from the National Household Survey of Drug Abuse and links drug and alcohol prices and policies to the individual records. The size of this data set makes it possible to estimate use, participation and demand curves for specific demographic groups. Public policies designed to reduce substance abuse have been oriented towards increasing the price of alcohol and illicit drugs. Little, however, is known about the relative responsiveness of various demographic groups to these policies. The data show that racial and ethnic minorities consume more cocaine, but consume less or equal amounts of alcohol, marijuana and heroin than the total population. The results also show a consistent pattern of negative own price effects for alcohol and illicit drugs and complimentarity between alcohol and illicit drugs. The own price effects did not differ substantially between demographic groups suggesting that price policies have a similar effect on all demographic groups. The pattern of complimentarity between alcohol and illicit drugs suggest that alcohol taxes also reduce drug use.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6432.
Date of creation: Feb 1998
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Publication status: published as Henry Saffer, Frank J. Chaloupka. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs," in Frank J. Chaloupka, Michael Grossman, Warren K. Bickel and Henry Saffer, editors, "The Economic Analysis of Substance Use and Abuse: An Integration of Econometrics and Behavioral Economic Research" University of Chicago Press (1999)
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Other versions of this item:
- Henry Saffer & Frank J. Chaloupka, 1999. "Demographic Differentials in the Demand for Alcohol and Illicit Drugs," NBER Chapters, in: The Economic Analysis of Substance Use and Abuse: An Integration of Econometrics and Behavioral Economic Research, pages 187-212 National Bureau of Economic Research, Inc.
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